Economy needs surgery, govt is applying balm: Congress

Mumbai: The Union government is applying only a balm to the economy when what is needed is a surgery, the Congress said on Friday, demanding that the focus should be on job-creating sectors such as construction and textiles.

Addressing a press conference here, Congress spokesperson Gaurav Vallabh also said the GST structure should be reformed, and the MGNREGA schemes should get more funds.

“While the economy needs a major surgery, the government is assuming it to be common cold caught from global headwinds (which) could be easily cured by a balm,” he said.

The Narendra Modi government should acknowledge that the problem was becoming deeper, and act by going beyond “headline management” and “tepid press conferences”, he said.

The focus should be on revival of sectors which can contribute more in terms of creating jobs, such as real estate and construction and garments and textile, he said.

The Goods and Services Tax (GST) should be reformed for making the filing of returns easier and improving the rate slabs, he said.

“Reduce delay in GST refunds of exporters as well as the domestic industry and ensure that they walk the talk. Strengthen MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) by providing more resources so that liquidity reaches the last person,” Vallabh said.

The fiscal deficit as per the CAG was 5.85 per cent and not what the Government stated, Vallabh claimed.

With more than 77 per cent of the annual target already used up in the first four months, the deficit at the end of the fiscal was likely to be higher, he said.

On merger of public sector banks, Vallabh said the decision was fraught with multiple issues.

Mergers call for significant integration of not only the operations, but technology, credit underwriting culture and people, he said.

“This is a massive exercise….Very recently there were two mergers of SBI and associates as well as Bank of Baroda, Dena Bank and Vijaya Bank. The banking system is yet to reap the positives of these mergers and suddenly a much more massive exercise of merging 10 banks into four banks has been attempted,” Vallabh said.

“At a time when bankers should focus on lending and resolution of bad loans, this merger has been thrust as if it is the last resort. This is likely to derail the process of revival which each of the banks were independently taking and (as) things were improving as per the RBI financial stability report,” the Congress spokesperson said.

In the auto sector, threat of more than 10 lakh people losing jobs was looming large, he said.

Maharashtra was affected significantly by the auto sector slowdown coupled with a major drought, he said.